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AutoLogisticsandSupplyChainManagementSummit2003,ThePracticeofVMIinChina,陈晖中国物流公司执行总裁,1,Agenda,OurunderstandingoftheautomotivelogisticsneedsWhatisVMIdefinition,proceduresandbenefitsChallengesofVMIinChinaCasestudyBriefintroductiontoChinaLogisticsCompany,2,AnautomotiveOEMslogisticsneedscoverbothinboundandoutboundoperationsofpartsandfinishedvehicles,Plant,Suppliers,ConsolidationandLoadingCenter,ServicePartsDistributionCenter,LogisticsforProductionParts,LogisticsforServiceParts,LogisticsforCompleteVehicles,Dealer,Dealer/ServiceStation,BondedWarehouseforImportParts,Ourunderstandingoftheautomotivelogisticsneeds,3,Supplychainmanagement(SCM)isthestrategicmanagementtoolthatcoordinatesthematerialandinformationflowsacrossthevaluechaintosupportadaptiveness,4,“Demand-pull”valuechainrequiresthecompaniestobeflexibleandableto“control”alargepartortheentiresupplychain,Suppliers,Manufacturing,Demandindirectlydrivesmanufacturingvolumethroughforecasts,Warehouse,Wholesale/Retail,“Supply-push”LogisticsChain,Suppliers,B2BExchange,Manufacturing,DirectDelivery,“Demand-pull”LogisticsChain,Manufacturingdrivenbyactualdemand,Therateofsupplywassetbythemanufacturerinadvance,basedonexpecteddemandItwastheroleofthelogisticsproviderstoensureajust-in-timesupplyofcomponents,Therateofmanufactureisdeterminedonareal-timebasisbytherateofdemandWhilethismodelismoreefficient,itrequiresperfectintegrationofalllogisticsoperationswithinoneprocess,Source:LehmanBrothers,A.T.KearneyAnalysis,5,Third-partylogisticsproviders(3PLs)candirectly,orthroughapartnernetwork,providearangeofservices,ProcurementPayablesmanagementSupplierpaymentandconsolidatedinvoicingVendorperformancemonitoringandexceptionreportingJointprocessimprovementwithvendors,OverallfreightcoordinationFullloadtruckcarryingLess-than-loadtruckcarryingSmalllot(lessthan150pounds)carryingOrderconsolidationDeliveryschedulingExpeditingspecial/rushordersReturningandreprocessingundeliverableordersDeliverytracingPerformanceandexceptionmonitoringandreporting,OverallinventorymanagementOptimizingsupplierorderschedulesOptimizingdealerorderschedulesCertificationofincomingshipmentsBarcodingPerformanceandexceptionmonitoringandreportingTrackingandReportingSystemsaccessibleviaInternetMaterialResourcePlanning,Orderpreparation/assembly/consolidationSourcingofpackagingmaterialsPrintingofcorrugateand/orlinerboardmaterialsLabelingShrinkwrappingofcasesandpallets,FreightandDistributionCoordination,WarehousingandInventoryManagement,MinorAssemblyandPackaging,Procurement,6,DifferencebetweentraditionalbusinessmodelandVMImodel,7,SimplestVMIworkflow,Manufacturer,Suppliers,2,3,4,1,Themanufacturerapprovesthepurchasingtermswithsuppliers,includingthecommonlyagreedinventoryresponsibilityandmaintenancescheme.Themanufacturersendsproductactivitydatatothesupplier.Thisproductactivityisbasedonwarehousemovementofproductconsumedattheassemblylinelevel.Basedontheagreedinventorymaintenancescheme,thesupplieredits,approvesandreleasesthesuggestedpurchaseorder.Themanufacturerapprovesthispurchaseorderandsendittothesupplier.,8,ConsolidationandLoadingCenteriscommonlyusedtoreducethecomplexityincoordinatingmultiplevendors,Qualityofdeliveryservicesfromvendorstoline-sidemightbedifferentVendorsshippingvolumemightbeverysmallgivenmorefrequent“demand-pull”ordersVendorsmightneedalargeline-sidebuffertocompriseafull-truckloadandmake-upasafetystockLargeline-sideareaisneededtoaccomplishunpacking,kitting,andpossiblysequencingofpartsbeforefeedingtoassemblylineIndividualvendorsmightrentwarehousesforthemselves,withlimitedscaletosharewithothervendors,Consistentdeliveryservicetoline-sideOptimalshippingvolumetoreducetransportationcostandinventorycostReducedrequirementonline-sidewarehousespaceCoordinationbetweensuppliersandproductionlinepossibletopromotesynchronizationandJIT,HowConsolidationandLoadingCenterApproachHelps,PotentialIssuesinSimplestVMIModel,9,Win-winsituationcanbeachievedforbothmanufacturers,PlanningandorderingcostsforthemanufacturergodownduetotheresponsibilitybeingshiftedtothevendorImprovedcustomerservicevendorscanbetterrespondtocustomersinventoryneedsintermsofbothquantityandlocationReduceddemanduncertaintybyconstantlymonitoringcustomersinventoryanddemandstream,thenumberoflarge,unexpectedcustomerorderswilldwindle,ordisappearThemanufacturerismorefocusedthaneverinprovidinggoodserviceandtheoverallservicelevelisimprovedbyhavingtherightproductattherighttimeSpeedandaccuracyofdataprocessingareimprovedduetocomputer-to-computercommunicationsReducedtotallogisticscostandimprovedcash-flow,10,andvendors,Smoothingdemandthesupplierisabletosmooththepeaksandvalleysintheflowofgoods,andthereforetokeepsmallerbuffersofcapacityandinventory.Bettercoordinationthesupplierhasbetteropportunitiestoco-ordinatetheshipmentstodifferentcustomers,suchasscheduling-eitherpostponingoradvancing-shipmentsaccordingtoproductionschedules,customerinventorysituationsandtransportationcapacityReducedinventoryrequirementsbyknowingexactlyhowmuchinventorythecustomeriscarrying,avendorsowninventoryrequirementsarereducedsincetheneedforexcessstocktobufferagainstuncertaintyisreducedoreliminatedSpeedandaccuracyofdataprocessingareimprovedduetocomputer-to-computercommunicationsReducedtotallogisticscostandimprovedcash-flow,Thebindingofcustomerstovendorsoncerelationshipisestablished,customerswillbereluctanttoenduretheamountofworkneededtoswitchvendors,11,Currently,mostautomotivemanufacturersinChinaconsiderConsignmentInventoryasVMI,VMIareusuallyusedasamethodtorealize“zeroinventory”whilethepartsaresittinginmanufacturerswarehouse,vendorsareforcedtofinishthetransferifpartsownershipuntilassemblyisdoneConsignmentInventory,ontheotherhand,aretheexactpracticeofmostvendorsandmanufacturersvendorsarenotinvolvedininventoryandlogisticsdecisions,ChallengesofVMIinChina,12,Thisconcept/beliefrevealsthetransactionalrelationbetweensuppliersandmanufacturers,Price-drivensourcingdecisionwithoutin-depthunderstandingofcoststructureLogisticscostandmaterialcostarecommonlyaddedupasalump-sum“CIFprice”Fewsuppliersarewillingto“opencost”totheircustomersunlessmarginisverythinSupplychainmanagementtargetsforcefullydrivesupplierstoreducepricetomaintainbusinessrelationPaymenttermsandpaymentsituationconstrainsuppliersfromgettinginventoryinformationunderconsignmentinventoryInventorymovementmeansactualconsumptionofproducts,immediatelystartingthemanufacturerpaymentcycleNeithermanufacturersandsuppliersmakesignificantinvestmentinbuildingEDItofacilitatedatasharing,Withouttransparentdatasharingandcollaborativesupplychainplanning,lose-losesituationarisesduetohigheroperation(transaction)cost,13,Toavoidthepotentialconflictbetweenmanufacturersandsuppliers,anindependentthirdpartycanbeemployedtohelpmanagetheVMIinitiative,Third-partyconsolidatestheshipmentfromvarioussuppliersThirdpartyfacilitatetheinformationexchangebetweenmanufacturer,consolidationandloadingcenter,andthesuppliersInformationisneutraltobothsuppliersandmanufacturers,signalingtransferofownershipaccordingtopre-agreedtermsThird-partycanhelpmanageinventory,unpacking,kitting,sequencinganddeliverytoline,milk-runningtheinboundpartsandpotentiallyplacingpurchaseorderonmanufacturersandsuppliersbehalfOwnershipremainsunchangedbeforeorafterVMIisimplemented,14,However,internalresistanceagainstoutsourcingtheVMIserviceremainsgenerallyverystrong,Nocommonunderstandingofhowthird-partycanhelpsmooththeVMIoperationStaffcurrentlyinchargeofinboundlogisticsareafraidoflosingjobsGeneralbelieftoholdpotential“profit”withinthecompanyNocostbenchmarktocomparetheoverallcostunderthird-partymanagementResistancetoshareinventorydatawiththird-partyAculturaladjustmentaswellasasignificantreorganizationofeverydayjobdutiesisrequiredtoaccomplishamajorchangeofcompanyoperations,VMIwillachieveitsacceptancegradually,especiallyaftertheanticipatedcompetitiveenvironmentin2-3years,15,AChineseOEMoutsourceditsinboundlogisticstoChinaLogisticsforoperatingassets,skillsandbettermanagement,OEMInboundLogistics,TheOEMwaspreparingformassproductionofanewpassengercarmodelonatotallynewplantInthepast,thesupplierswereaskedtodeliverallcomponentstothelinesidewarehouseTherearenotenoughin-houseoperationstaffandspacetocopewithexpansionofproductionThemanagementoftheOEMwouldliketofocusonmanufacturingofvehicles,whileoutsourcemostofitslogisticstothirdparty,ChinaLogisticsrefurbisheda4,500Sq.M.warehousesituated8kmfromtheassemblylineInaddition,emergencyorderscanbedispatchedwithintenminutesofnotificationanddeliveredtolinesidewithin30minutesPartsarestored,pickedandmarshalledaccordingtowheretheyareusedontheassemblyline,withloadsconfiguredindirect-to-lineorderScalerampedupfrom40unitsperdayinNovember2002to180unitsinMarch2003Inatypicalweek,theChinaLogisticsteamhandlesmorethan3,000differentproductlinesandmakessome250just-in-timedeliveriestolinesidereceivingpoints,ChinaLogisticsApproach,Situation,SelectedCaseStudies,16,Thereareseveraldifferentfactorstoconsiderindesigninganappropriateinventorylevel,Orderto-deliveryleadtimeOrdersizeandfrequency,AnnualthroughputPerSKUdemandCompletevehiclesalesvolumeCarparc(penetrationrate),TotalnumberofSKUsKittingorotherneeds,PurchasingleadtimeTransportationleadtimePurchasingordersizeandfrequency,CustomerNeeds,VolumeForecast,SKUComplexity,InboundProcess,SolutionSelection,TotalCost,TransportationcostWarehousingcostLaborcost,LevelofIntegration,Sourceofmaterials(externalsuppliersorOEMfactory)Locationofsuppliers,OEMInboundLogistics,17,CurrentOperationalCharacteristicsrelatedtoMaterialsManagement,20+domesticand50+overseassuppliers,Supplier,1,Customerinvolving:,LogisticsDept,QualityDept,PlanningDept,Supplier,X,Supplier,2,Supplier,3,Supplier,22,Operationalcharacteristics:,ComponentSupplierInboundLogistics,Atpresent,CustomerXdirectlycontactamultitudeofsuppliers,toPlaceP/O;MonitorP/Ostatus,changeP/Oifnecessary;Receiveandunpackparts,storeandpickingInspectandsortparts;Delivertoassemblyline;Checkdocumentationandfinallypayinvoice.Itinvolvesfunctionsacrossthecustomer:ProductionPlanningQualityControlLogisticsandMaterialsManagementITFinance,18,Majorcapacityandqualityissuesariseswhen50%annualgrowthisanticipated,Under-capacityforwarehousingspaceThereareconstraintsasproductioncapacityneedstobeboomedtomeetincreasingcustomerdemandsManufacturingflexibilityislowWhenpartsorderedbeforearealreadyontheirwa
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